FAQ: What Happens to Your Medical Bills at Settlement?
When you file a personal injury claim, the hope is that you will ultimately receive a financial settlement to help you cover your accident-related expenses. Many attorneys sell their clients on the promise of receiving a large settlement when all is said and done, leaving many personal injury claimants confused and surprised when their final settlement check falls short of what they were expecting.
In real life, plaintiffs need to understand that there are a lot of loose ends to tie up when resolving a personal injury claim. Medical bills are often a major source of confusion for injured victims and their loved ones throughout the claim resolution process, so it is important to familiarize yourself with how these expenses are reconciled at the conclusion of a case. Let us take a closer look at how medical bills are commonly addressed during a personal injury claim and explore how negotiating medical liens after a settlement can help you protect what you take home.
The significance of medical bills in personal injury cases
Medical bills are often some of the largest expenses in personal injury cases. Between emergency treatment, surgeries, diagnostic tests, physical therapy, prescription medications, and long-term care costs, the financial implications of a serious injury can be taxing at best and devastating at worst. In cases involving catastrophic injuries, it is not uncommon for medical expenses to add up to six or even seven-figure dollar amounts, leaving many injured victims uncertain as to how they are going to pay for their care.
The point of a personal injury case is to hold negligent parties personally and financially responsible for the harm they cause by compelling them to compensate their victims for their medical expenses, lost income, pain and suffering, and other accident-related losses. These cases can take a long time to resolve, however, leaving accident victims on the hook for an ever-growing array of expenses related to their care and recovery.
What is a medical lien?
For many personal injury plaintiffs, the upfront costs of their medical treatment may far exceed their financial means. This is one of the hardest parts of navigating personal injury cases, as patients who lack the ability to pay for their own care often find themselves delaying treatment, accepting hasty settlement offers, or considering taking out hefty loans to cover their expenses.
In these situations, some medical providers may be willing to place a medical lien on a patient’s settlement amount. This ensures providers get paid from your settlement funds once your case concludes without requiring that you pay cash up front for the services they provide. Essentially, liens are more or less paid before you receive your share of a settlement, and if they are not managed properly, they can cut your recovery significantly.
What if my medical bills are more than my settlement?
If your total medical costs exceed the amount afforded to you in your final settlement award, poor settlement planning can leave you high and dry. Financial recovery is not always impossible in these cases, however, as long as the plaintiff chooses to partner with a skilled personal injury attorney.
Experienced legal professionals can help their clients negotiate with lienholders in the hope of reducing the amounts owed. Whether a medical lien was placed by a provider, healthcare facility, insurance company, or government assistance program, the right attorney can help you arrive at a more favorable agreement that will not require that you walk away from your settlement empty-handed.
Private healthcare providers may negotiate reduced payoffs for prompt cash. When it comes to private healthcare providers, the exorbitant costs frequently lead to delays in payments. Given the choice between lengthy negotiations and slightly lower amounts of cash-in-hand, many healthcare entities will opt for the cash. However, note that governmental subrogation entities like TennCare and Medicare are often more legally constrained and generally less negotiable.
How to negotiate liens after settlement
Coordinated lien negotiation is essential for maximizing what you receive after your bills are paid. A reliable personal injury attorney will understand the complexities involved in negotiating medical liens and provide you with the guidance and support you need to move through the process.
While each case is unique, here is a step-by-step overview of what the negotiation process usually looks like:
Step 1: Your lawyer reviews every lien in your case for accuracy and legality and challenges any inflated or improperly filed claims they come across.
Step 2: Your attorney attempts to negotiate significant discounts from providers who are eager to settle your debts.
Step 3: You and your attorney determine whether a lump-sum offer or structured payment plan makes the most sense in terms of maximizing your ultimate payout.
Step 4: You wait. It is not uncommon for negotiations to take weeks or even months to conclude, depending on the complexity of the case and the number of lienholders involved.
If you and your attorney are successful, you may end up walking away with more money than you thought was possible at the onset of the settlement process. It is important to carefully follow any and all instructions given to you by your legal team throughout these negotiations in order to maximize the potential value of your settlement and increase your chances of having your lien amounts reduced.
Payments at settlement
There are often a number of parties involved in personal injury settlements, and each of these parties expects to be paid their due. In general, funds will be distributed at settlement to pay:
- Liens from healthcare providers (e.g., hospitals, doctors).
- Insurance or government reimbursement claims (Medicare, Medicaid, private insurers).
- Legal fees and case costs.
Any remaining proceeds will then be paid to the injured party to help them cover economic and non-economic damages like pain and suffering, lost wages, reduced capacity to work, emotional distress, future care costs, and more. The name of the game is to reduce the amount of money a plaintiff owes to other parties in order to maximize the amount of money they walk away with at settlement.
Final thoughts
Injury-causing accidents can have life-changing financial ramifications for victims and their families, but that does not mean justice cannot be served. Even if the upfront costs of your medical care exceeded your financial capabilities at the time of your accident, a well-negotiated settlement can help you close the gap and then some.
If you are worried about what happens if your medical bills are more than your settlement, the skilled personal injury attorneys at Rocky McElhaney Law Firm can help you negotiate down liens, manage your settlement reimbursements, and walk away with meaningful compensation when all is said and done.
Do not let medical debts drain the results of your recovery. Fill out our online contact form or give us a call today to learn more about how our trusted team of Nashville personal injury attorneys can help you fight for the full amount of compensation you deserve.